The bill would allow any member of Congress to request a long-term score covering at least 50 years for any legislation that already received a traditional ten-year CBO score. To support this work, the measure would create a division of long-term scoring at CBO and authorize $5 million a year to fund it. The measure would provide the CBO Director some flexibility in determining the information provided and length of the long-term scores based on practical considerations.

Background

The Congressional Budget Office (CBO) currently provides formal cost estimates for legislation within a ten-year window, although in rare cases CBO provides some supplementary information about the long-term impacts of legislation. For example, as we explained in our report Looking Beyond the Ten-Year Budget Window, CBO provided second decade analysis of the immigration reform bill that passed the Senate last June.

However, the ten-year window measured by CBO often does not provide a complete picture and is utilized by lawmakers to skirt fiscal responsibility by hiding the true deficit impacts of legislation in the eleventh year and beyond. For example, the unemployment insurance extension that passed the Senate recently contained a pension smoothing gimmick that hides costs in the out years by changing the timing of obligations without changing the magnitude. Alternatively, policymakers pull savings scheduled in the out years into the budget window, as Congress did in the recent SGR patch, by moving cuts scheduled in 2025 to 2024. Changes to Roth IRA accounts are another trick used by lawmakers to create savings inside the budget window, even though the changes are paired with costs outside the budget window. This device was used in different ways in the fiscal cliff deal and Chairman Dave Camp’s (R-MI) recent tax reform proposal.

The legislation could encourage lawmakers to focus more on the long-term costs and benefits of legislation and create an incentive to pursue policies that improve our long-term fiscal outlook. As CRFB President Maya MacGuineas stated in an article about this legislation “There’s such a bias right now toward the short term, this is a really important step. A long-term analysis would be good both for fiscal issues in the budget and promoting smart investments and policies that would grow the economy.”

In addition to preventing the gimmicks highlighted above, long-term scoring could shine light on policy changes with upfront costs and long-term savings. For example, Health Affairs recently noted that spending on preventative care for diabetes patientscreates the most savings outside the ten-year budget window.

Further, long-term scoring could provide useful information about policies that produce additional savings outside the ten-year window. The premium support proposal, Medicare age increase, and cost sharing reforms in the Ryan Budget begin late in the ten-year window and are thus given only partial credit in a traditional ten-year score. Similarly, the cost sharing reforms in President’s Budget do not begin until 2017 and would only apply to new beneficiaries, resulting in much greater long-term savings than appears in a traditional ten-year score.

It is important to note that while the bill would provide lawmakers with additional information about costs and savings outside the ten-year window, those impacts would not be allowed to be used to offset impacts inside the window for the purpose of PAYGO or other budget rules.

The Bottom Line

We support efforts to provide policymakers with as much information as possible when considering the budgetary impacts of legislation, and additional information about the long-term fiscal effects of legislation is particularly important given our long-term fiscal challenges. The bill acknowledges the challenges in preparing long-term estimates by providing for additional funding for CBO and giving CBO flexibility to judge what information can practically be provided. But even recognizing the challenges and shortcomings in long-term estimates, additional information about the long-term budgetary effects of legislation will make a valuable contribution to the legislative process.